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Mattress and bedding products maker Sheela Foam Ltd, which sells its products under the brand Sleepwell, saw its initial share sale open to slow start on Tuesday.

At the end of the first day of the three-day issue, it managed to find bidders for just 1.46% of the shares on issue, stock exchange data showed.

The IPO saw sole bids from retail investors and high net-worth investors. The retail category was subscribed 0.28 times or 2.8%, while the non-institutional non-retail portion received just 0.2% bids.

The firm did not see even a single institutional investor bidding for shares on day one, data showed.

This should worry the firm and its bankers as last week another IPO was scrapped after it did not find institutional investors to bid for shares.

The first IPO after the government kicked off demonetisation of higher denomination currency early this month, GreenSignal Bio Pharma Ltd, which was aiming to raise as much as Rs 116 crore (which was later trimmed to Rs 110 crore) in its IPO, withdrew the public issue after failing to garner sufficient bids from institutional investors. It bore the brunt of stock-market volatility after the government announced demonetisation and the surprising result from US presidential elections.

To be fair, many issues did start with slow start but ended with bumper oversubscription. High net worth investors in particular tend to join in droves only on the last day of IPO period.

Sheela Foam and its merchant banks leading the issue believe the impact of demonetisation will be muted in its case though the valuation could have been slightly higher.

The issue could have been priced higher if not for the government notification to de-legalise Rs 500 and Rs 1,000 notes, Rahul Gautam, managing director of Sheela Foam, said last week.

A day ahead of the IPO, Ghaziabad-headquartered Sheela Foam had raised Rs 153 crore ($22 million) from anchor investors on Monday .

Wipro chairman Azim Premji’s private investment firm PremjiInvest among several mutual funds and other institutional investors came on board as part of the anchor allotment.

The anchor investors picked shares at the upper end of the band of Rs 680-730 a share.

Sheela Foam is seeking a valuation of as much as Rs 3561.14 crore (roughly $520 million) through the IPO that opens on 29 November.

The issue entirely comprises an offer for sale by one of the promoter companies Polyflex Marketing Pvt Ltd and the firm shall not get any money from the IPO. The overall issue is worth Rs 510 crore ($77 million). Post the issue, the Gautam family is likely to retain around 86% stake in the entity.

With the anchor allotment, the IPO size would shrink to around Rs 363 crore.